Wall Street-Bred Tech Startup Symphony Is Here To Stay

Two years ago, when a consortium of heavyweight financial firms including BlackRock, Bank of America, Citadel, Citigroup, Goldman Sachs and Morgan Stanley ponied up a collective $66 million to back the creation of messaging company, Symphony Communication Services, many took the launch as a direct challenge to Bloomberg's near monopoly over communications on Wall Street.

The launch came roughly a year after it was revealed that some Bloomberg reporters had used internal functions on the over $20,000-a-year terminal to spy on bankers for scoops, and amidst a time of dramatic cost cutting on Wall Street's sell-side. The financial media dubbed Symphony as a 'Bloomberg killer,' poised to chip into the terminal's ubiquitous position on powerful trading desks. So much so, that as Symphony founder David Gurle has built up the company over the past two years, he's repeatedly rejected the notion that its sole purpose is to take on Bloomberg.

On Thursday morning, at Symphony's annual 'Innovate' conference in Manhattan, the world got a revealing glimpse of the work going on inside Gurle's communications startup, which has raised $170 million from banks, hedge funds and asset managers, in addition to Google. If Symphony isn't expressly an alleged "Bloomberg killer" one thing is clear: The two year old startup is here to stay and it may become the hub from which Wall Street is able to embrace mobility, new communication platforms, and an ever growing crop of applications for data and investment analysis.

The Bloomberg Terminal is often celebrated for its endless financial market data and analytical tools, all in one place and in an interface (hardly updated since the 1990s) that rarely crashes. But its dominance on Wall Street has always centered around messaging, where the biggest traders in fixed income, foreign exchange, commodities and equities negotiate transactions through instant messages and emails. If you're a trader at a large bank or hedge fund, it's almost impossible to survive without a terminal. The more opaque the market - for instance swaps, structured products, or other derivatives - the bigger the need for a Bloomberg.

If Symphony is quietly seeking to win this type of business, it is a far way out. But at Symphony Innovate on Thursday morning it was clear the company is encroaching on Bloomberg's turf by angling to become a part of Wall Street's workflow. Bloomberg is still Wall Street's de-facto and Ferrari-priced terminal, but Symphony may become the low cost Slack-like network where the financial sector shares information.

Here's why: Symphony aims to become a one-stop and secure layer to the proliferation of new ways in which Wall Street communicates and analyzes financial data. And it already has the sizable base of powerful users that gives it stickiness. The Palo Alto, Calif.-based company disclosed on Thursday it counts 104 financial organizations, including virtually every major bank and 30 buy-side firms, as users. Overall, the $15 a month platform has 116,000 total users and roughly 52,000 of these daily users use Symphony to interact outside of their organizations.

Furthermore, Symphony announced partnerships with financial data services like ChartIQ, FactSet, Selerity, Dow Jones and S&P Global Market Intelligence, trade execution management service FlexTrade, IT services like Avaya, FIS MarketMap and Gemalto, and financial back office services like MarkitSERV, bringing these tools onto its platform. Symphony is also available on third party applications like Salesforce, JIRA and Github. These partnerships enrich the information being disseminated on Symphony and bolster its overall importance.

A presentation made by MarkitSERV underscores how Symphony stands to make major inroads. MarkitSERV is used by swaps traders to confirm trades, which are often negotiated bilaterally between parties and stretch into the hundreds of billions of dollars in notional value. These trades can be thrown off by minor communications problems, and banks collectively have thousands of back office staff to weed through errors, communicating by email, excel, phone, and so on.

However, now that MarkitSERV is on Symphony, these back office employees can connect to each other in a seamless fashion with instant messages, digital calls and video conferences. These communications can be recorded for compliance purposes, they are encrypted, and don't rely on the IT security of an outside firm. And there's other novel functionality. Back office staff can even affirm or fix their trades using MarkitSERV's application on Symphony, making the platform likely a must-use service for the part of Wall Street that Bloomberg rarely touched.

If Symphony can replicate its MarketSERV partnership with other similarly important financial cogs, and add to its growing number of applications, it may wind up becoming something far more expansive than its 'Bloomberg Killer' designation. Other applications such as Selerity or FactSet can be accessed in the Symphony environment. The expansion opportunities seem endless, especially as the investment world is altered by the rise of startups focused on data analysis, artificial intelligence and cloud computing.

As fintech continues its rise, it is Symphony's environment where firms may bring in new apps and tools due to its security and oversight. The network's low monthly cost is likely already a major value for users and may fuel growth and the network effects that could come from connecting blue chip firms on the buy-side and sell-side.

“Our mission is not to be an aggregator. We are not a terminal, we are a platform," Gurle recently told FORBES. In a press release Thursday he expanded on Symphony's mission statement.

Symphony Meetings, Webhooks, and our partner program collectively balance our vision of building the secure collaboration platform that powers work.

By addressing the needs of employees who count on cutting-edge, rich interactive tools, the needs of developers to integrate applications into Symphony to improve workflow, and the needs of enterprise IT managers for security and compliance, Symphony responds to the way we work. Symphony enables and represents a community of innovators building the future of work, together.